Sigmund Company completed the following transactions:
Jan. 9 Sold merchandise on account to Roger’s Supply, $1,200.
Jan. 15 Wrote off the account of Pete Ramirez as uncollectible because of his death, $500.
Mar. 17 Received $450 from Roland Co., whose account had been written off in 2011.
The account was reinstated and the collection recorded.
Apr. 9 Received 18% of the $4,100 owed by Lane Danks. The remainder was written off as uncollectible.
June 15 The account for Mae’s Garage was reinstated for $1,500. The account was written off three years ago and collected in full today.
Oct. 18 Prepared a compound entry to write the following accounts off as uncollectible: Jim’s Diner, $220; Kross Auto, $460; Reece’s Hardware, $800.
Nov. 12 Sold merchandise on account to J.B. Rug, $2,200.
Dec. 31 Based on an aging of Accounts Receivable, it was estimated that $7,000 will be uncollectible out of a total of $165,000 in Accounts Receivable.
Dec. 31 Closed Bad Debts Expense to Income Summary.
From these transactions as well as the following additional data, complete a–c:

a. Journalize the transactions.
b. Post to Allowance for Doubtful Accounts, Income Summary, and Bad Debts Expense accounts as needed.
c. Prepare a current assets section of the balance sheet. Ending balances needed are as follows: Cash, $13,500; Accounts Receivable, $165,000; Office Supplies, $2,100; Merchandise Inventory, $105,000; Prepaid Rent,$1,350.

  • CreatedApril 24, 2014
  • Files Included
Post your question